Ardmore Shipping CEO Anthony Gurnee does not expect a real recovery for the ailing product tanker market before late 2019.
He thus contradicts forecasts from Torm and Concordia Maritime's CEOs, which have said in comments to ShippingWatch that the product tanker recovery has now seriously taken off in the fourth quarter.
"There's been a real step change. The market is improving compared to the third quarter and we can already see it in our numbers," said Torm CEO Jacob Meldgaard in connection with the carrier's quarterly report, while Concordia Maritime CEO Kim Ullman expressed similar sentiments.
Gurnee is more cautious.
"MR rates are unlikely to continue on a steady upward trend; there will be rate volatility, but the overall trajectory will be upward as we work our way through 2019 with a tightening MR supply-demand balance," he says in a comment to ShippingWatch, adding that in the fourth quarter seasonal factors also played a part, including preparations for the winter.
Cyclical low point reached
For many months, the product tanker market has battled with record-low rates and too many vessels but the bottom looks like it has been reached, says analyst Jo Ringheim from Arctic Securities.
"Following 18 months of challenging market conditions, we believe the tanker markets have started to rebalance and have the cyclical trough in the rear view mirror," says Ringheim in a comment to ShippingWatch.
"The recent surge in crude rates has spilled over to product tankers, which are now benefitting from LRs converting to dirty trade and crude tankers no longer cannibalizing on product tankers on their maiden voyage," he says, adding that average daily rates for MR and LT vessels sat at USD 20,000 and USD 17,000 in 2019.
A recovery also requires that tanker carriers hold off from ordering new tonnage, stresses the analyst.
English Edit: Lena Rutkowski